TDS ON PROPERTY

Demystifying TDS on Property: What Every Buyer and Seller Should Know

Buying or selling property is often one of the most significant financial decisions in a person’s life. But amid the legal formalities, documentation, and emotions attached to such transactions, one crucial aspect often slips through the cracks—Tax Deducted at Source (TDS) on property transactions.

Introduced by the Indian Government under Section 194-IA of the Income Tax Act, this regulation ensures that property deals involving ₹50 lakh or more are monitored for tax compliance. While it sounds straightforward, many individuals and even real estate professionals overlook the finer nuances, leading to penalties and compliance hassles.

At FIUATE, we have seen an increasing number of cases where clients come to us post-transaction, unaware that TDS had to be deducted or was wrongly filed. The good news is, a little awareness and the right professional support can turn this obligation into a simple, automated step in your property deal.

According to Section 194-IA, if you're buying an immovable property (other than agricultural land) valued at ₹50 lakh or above, you are legally required to deduct 1% of the total sale consideration as TDS before paying the seller. This deduction must be deposited with the government within 30 days of the transaction, along with Form 26QB—a combined challan-cum-statement.

This applies whether you're purchasing residential or commercial property, and whether the payment is made in instalments or as a lump sum. Importantly, the onus is on the buyer, not the seller.

Many buyers remain unaware of this responsibility, assuming that TDS is something only employers deal with. Others get stuck in the web of PAN mismatches, errors in online forms, or delays that result in penalties, interest, and late fees—all of which can easily be avoided with timely professional assistance.

In cases of joint ownership, where multiple buyers or sellers are involved, confusion often arises. Each buyer is expected to deduct and deposit TDS in proportion to their share, even if their individual transaction amount is below ₹50 lakh, provided the overall sale value exceeds the threshold.

Handling TDS on property is not just about filling a form. It’s about ensuring:

• Accurate deduction at the right time

• Proper payment through government-approved portals

• Correct filing of Form 26QB

• Timely issuance of Form 16B (the TDS certificate) to the seller

• Avoiding penalties due to PAN errors or late filing

At FIUATE, we’ve helped hundreds of buyers and sellers ensure stress-free compliance—often integrating TDS advisory as part of our broader accounting, taxation, and real estate financial consulting services. We believe that the role of an accountant today is not limited to just number-crunching; it’s about enabling informed decisions.

What makes us different is our client-first approach. We don't just file forms—we educate, guide, and handhold clients through the entire compliance journey. Whether you're an NRI selling a property in India, a first-time buyer navigating complex paperwork, or a builder looking to streamline multiple transactions, Fiuate is your trusted partner.

We offer:

• One-stop TDS-on-property compliance packages

• Custom reminders for due dates and certificate issuance

• Consulting on capital gains and investment strategies

• Support for corrective filings and dispute resolution

If you're planning to buy or sell property valued at ₹50 lakh or more, don't wait till the last minute. Seek professional advice in advance. Not only will it protect you from future headaches, but it may also uncover tax-saving opportunities and help streamline the entire transaction.